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Earnings-Focused ETF (EPS) Hits New 52-Week High

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For investors seeking momentum, WisdomTree Earnings 500 Fund EPS is probably on radar. The fund just hit a 52-week high and is up about 56% from its 52-week low price of $29.61/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

EPS in Focus

This fund provides exposure to earnings-generating companies within the large-cap segment of the broad U.S. stock market. It has key holdings in information technology, financials, health care and consumer services that make up for a double-digit exposure each. The ETF charges 8 bps in annual fees (see: all the Large Cap Value ETFs here).

Why the Move?

The earnings-weighted ETF has been an area to watch lately given that corporate results have turned out better than expected with all-around strength and momentum. Earnings from the 425 S&P members that have reported Q1 results so far are up 47% on 10.3% higher revenues, with 85.9% beating EPS estimates and 76.7% beating revenue estimates. Both earnings and revenue growth are tracking above the group’s recent trend, including the pre-pandemic period. In fact, the overall Q1 total earnings are on track to reach a new all-time quarterly record. Further, estimates for the current and coming quarters are steadily going up — a trend that has been in place since last summer. In such a scenario, the ETF has the potential to move higher relative than any other product. As a result, tilting toward this key metric is a sensible choice at present.

More Gains Ahead?

Currently, EPS has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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WISTR-US LC FD (EPS): ETF Research Reports
 
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